Nonformal Education as a Major Nonfinancial Component in the Empowerment of Poor Microfinance Clients By Juma Abdu Wamaungo, BACE, M.

Pd

Introduction
The microfinance industry is experiencing changes which have led to a shift from financial services to nonfinancial services. This is said to be caused by the complexity of poverty. Poverty is still a major constraint for development in most developing countries. Need for innovations in regard to services delivery for the poor by the MFIs.

Studies have began to come-up showing that in this knowledge economy, three elements which include: capital, knowledge and opportubity are key to the empowerment of the poor people. Nonformal education is a major point of focus here, it is a main Nonfinancial aspect in the MFIs. The activities comprise: adult training in areas like: financial management education, life skills (both soft skills and hard skills), out bond activities, community mentorship and counseling, education for sustainable development plus religious and value education for poverty alleviation

Purpose of the Study

To examine how nonformal education as a nonfinancial aspect in the microfinance industry works to empower the clients

Nonformal Education and Microfinance Conceptual Framework

2 Nonformal Education Training, Mentorship, Life Skills, Entrepreneurship community education, Religious and value education, and Family care, nutrition and health education 1 1 Microfinance Services NFE & MFS Credit with education model: Increased food security, Nutritional status, Productive economy work, Rotating funds etc, Family education 3 Outcomes
1. Productive economy 2. Self-reliance and selfsustaining, 3. Selfconfident, and 4. Household incomen

Credit and loaning scheme for the poor, Savings for the poor, and Insurance packet for the poor

Foundation for the Study

The struggle to eliminate illiteracy and poverty, require more innovative approaches. Indonesia, clearly states in its National policies that to hasten the fight against illiteracy needs to raise the peoples quality of life, alleviate poverty, and develop Indonesias human resources. The initiative of an education and microfinance approach is a significant strategy to fight poverty. The approach is appropriate in serving the lowincome earning people where as on the one hand, it improves their knowledge and skills.

Questions Asked
1. How is nonformal education in microfinance work to empower client in the microfinance clients? 2. How does the education and microfinance approach combine credit and savings for the empowerment the

poor clients?

Findings
Indonesias MFI have there own way of integrating credit with education. Education with credit increases skills of the clients. Nonformal education in microfinance has become a major component in the instilling skills to the microfinance clients.